Wells Fargo Earnings: Maintained Guidance Overshadows Decent Results

Key Morningstar Metrics for Wells Fargo

• Fair Value Estimate
  : $92.00
• Morningstar Rating
  : ★★★★
• Morningstar Economic Moat Rating
  : Wide
• Morningstar Uncertainty Rating
  : Medium

What We Thought of Wells Fargo’s Earnings

Wells Fargo WFC reported serviceable third-quarter results, with net revenue growth of 2% and earnings per share growth of 8% from a year ago. Still, a lack of any positive revisions in net interest income and expense guidance in 2026 weighed on investors’ minds, sending shares down 3%.

Why it matters: Unshackled from the asset cap, Wells Fargo was primed to thrive over the trailing year as it recaptured some lost deposit market share and deployed freed-up regulatory capital towards growing its balance sheet, though its allocation has puzzled investors in this environment.

• Wielding one of the strongest franchises across retail and middle-market clients, we’ve been pleased to see the firm pick up where it left off as a deposit gatherer, as another quarter of sequential growth brought average deposits up 11.4% since the asset cap was lifted in the second quarter of 2025.
• Wells Fargo has prioritized the growth of its institutional trading desk, a capital-intensive business that earns narrower spreads than traditional banking, compressing its net interest margin by 18 basis points over the trailing year to 2.43%, and yet, markets revenue declined 1% from a year ago while larger peers experienced material growth.

The bottom line: After digesting results, we are lowering our fair value estimate for wide-moat Wells Fargo to $92 per share from $93, as our revised forecasts incorporate lower near-term trading revenues and higher deposit costs. We view shares as undervalued and believe the recent sell-off presents investors with a buying opportunity.

• Though Wells Fargo has fallen a bit short of expectations in an attractive banking backdrop, we view the recent sell-off as overblown and see Wells Fargo poised to ride the tailwinds of a higher-interest-rate environment. With deposit costs of 1.51%, among the lowest in banking, we see greener pastures ahead.